California Moving Too Slowly On Customer-Sited Energy Storage

It may surprise many around the country that California would reject a bill in the legislature to give long-term certainty to the energy storage market and to repeat the successes the state has had with solar. However, the Assembly Utilities and Energy Committee quietly killed a bill last week that would have created a program similar to the California Solar Initiative for customer-sited energy storage.

The storage businesses in the state would have had the opportunity to double-down on their investments and create more jobs and energy independence across the state. The bill, S.B.700, would have provided the runway that California businesses need to bring down storage prices and to eliminate the fits and starts that characterize the current market. Under pressure from utilities, the bill was tabled until next year without even a vote. Utilities see customer-sited storage as the next frontier in massive grid defection. But as we move toward electrification, storage is just another tool for consumers to control their energy use and to integrate more renewables on the grid.

The bill would have created up to a $1.4 billion extension to the current Self-Generation Incentive Program (SGIP) and would have given the industry long-term certainty to invest in storage in the state. The bill would have created a 10-year rebate program that declined in steps to zero, forcing businesses to bring down prices over time and get the industry off rebates.

The bill had passed the state Senate and was up for a vote in the Assembly Utilities and Energy Committee when it was pulled from the agenda. The unexpected coalition of supporters of nearly 100 businesses, environmental justice groups, trade associations low-income and housing advocates, state environmental groups and workforce development advocates all see the benefits of customer-sited storage, and we were pushing hard for a bill many thought wouldn’t even see the light of day after the first committee. Under the leadership of the bill’s author, State Sen. Scott Wiener, D-San Francisco, the bill gained momentum and was headed for a vote in committee when it was pulled from the agenda. Although many thought of this as a big lift and a “two-year bill,” our unique coalition nearly got the bill through in one year.

Bernadette Del Chairo, executive director of CALSEIA, led a social media campaign during Intersolar North America’s opening ceremony last week as a final push before the legislative committee decided to let the energy storage bill die. Attendees held up pieces of paper saying, “Pass SB 700.”

SGIP has sparked a nascent industry of nearly 200 developers, installers, and manufacturers competing in this new space. These fledgling businesses need a longer runway to invest in technologies and practices that will bring prices down so that state rebates are no longer needed. Energy storage is key to our clean energy future, and the state should support the industry it has already created so that the benefits are felt across California.

The biggest benefit to customer-sited storage? Private investment is fueling the bulk of the industry. Ratepayers pay a small fee that provides rebates to storage projects, and the rest of the cost is shouldered by investors and customers. Private investment is fueling this distributed solution to our ramping and curtailment issues, allowing for more renewables on the grid and providing grid benefits, which saves money on expensive infrastructure upgrades. Ratepayers that don’t have storage on their homes or businesses benefit from the private investment made by customers who choose to invest in storage. Moreover, ratepayer investment, combined with declining rebates, will bring down the prices of storage overall, making the technology more affordable.

California is a leader in storage. But the state has much more work to do to become the international storage market leader that it is for solar and other clean energy firsts. Storage on the customer side of the meter can also provide unique ancillary grid benefits while managing demand-side load that can defer expensive transmission and distribution upgrades. If we do that all through utility procurement, we lose a competitive market and we put ratepayers on the hook to pay for big utility projects. Let me be clear: We need utility-scale storage to manage supply-side issues, among other important reasons. But we also need distributed resources to manage demand-side issues.